CMS 2010-2011 Budget Update March 10, 2010. 2 CMS 2010-11Budget Update.

CMS 2010-2011 Budget CMS 2010-2011 Budget UpdateUpdate

March 10, 2010March 10, 2010

2

What is the CMS operating budget?

CMS 2010-11Budget Update

CMS 2010-11Budget Update

2009-10 Adopted Current Expense Budget$1.14 Billion – Operating Funds

134,448 Projected K-12 Student Enrollment$8,483 Budgeted Cost Per Pupil (K-12)

Revenue Sources

56%

14%

28%

2%

State Federal/Special Programs

Local Other Local

3

CMS 2010-11 Budget Update 4

Revenue Uses (Expenditures)

66%

18%

5% 1%10% 0%

Salaries Benefits Supplies & Materials

Other Purchased Services Furniture & Equipment

CMS 2010-11 Budget Update

CMS Budget Trends

5


Sources of Revenue Trend

6

32.0% 35.0% 31.9% 30.9% 29.1% 29.4% 27.8%

62.4% 58.9%58.3% 59.0% 59.9% 60.2%

55.7%

4.5% 5.0% 7.9% 7.7% 8.2% 8.5%14.6%

1.1% 1.1% 1.9% 2.4% 2.8% 1.9% 1.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1999-00 2001-02 2003-04 2005-06 2007-08 2008-09 2009-10

Recent Trend

County State Federal Other Local

History


Expenditure Trend by Purpose

71.4% 72.0%72.1%71.8%

1.5% 1.5%1.8%1.4%

19.9% 19.4%18.8%19.2%

7.2% 7.1%7.3%7.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

06-07 07-08 08-09 09-10

Instructional Instructional Support Operations Leadership

8


• Cut $161.3 million through reduction and redirections• Opened 19 new and/or replacement schools• Added more than 2.4 million additional square

feet • Grown to more than 5,031 acres• Added more than 4,600 students • Increased student achievement in 24 of 25 areas tested

Since 2006-07, CMS has:

Summary of Reductions Since 2006-07

2009-10 Budget

Reductions

% of State

& Local Budget

2008-09 Budget

Reductions

% of State

& Local Budget

2007-08 Budget

Reductions

% of State

& Local Budget

2006-07 Budget

Reductions

% of State

& Local Budget

Superintendent & Operations Division

(23,163,051)

10.14%

(7,347,516)

3.31%

(4,202,863)

2.14%

(6,527,258)

3.58%

% of total reductions 21.72% 38.17% 20.65% 43.49%

Academic Services Division

(27,889,959) 14.01% (4,846,412) 2.58% (7,829,831) 4.64% (917,773) 0.60%

% of total reductions 26.14% 25.18% 38.47% 6.11%

Schools Division (55,626,298) 8.66% (7,054,883) 1.11% (8,318,787) 1.45% (7,566,092) 1.48% % of total reductions 52.14% 36.65% 40.88% 50.40%

Total (106,679,308) 9.97% (19,248,811) 1.84%

(20,351,481) 2.17%

(15,011,123) 1.77%

Since 2006-07 over $161.3M in reductions/redirections have been made in the CMS budget. State Reductions since 2006-07 - $40.9 million Local Reductions since 2006-07 - $120.4 million Note: Reductions are reflected by area in which the expenditure is budgeted; many expenditures are budgeted centrally and then expended at the school level.

9


How are we planning for the 2010-2011 budget?

10


Framework for Budget Development

• Align resources to support Strategic Plan 2014

• Keep strong academic focus coupled with data driven decision making

• Recognize and plan for the impact of the economic environment and employ sound fiscal management – respond to signals from state and local sources that funding may be limited

• Acknowledge uncertainty regarding expected funding levels from all sources, but be prepared for the worst

• Request funding from County for growth, sustaining operations and opening new schools

• Pay for Strategic Plan 2014 initiatives through budget reductions or redirections

• Establish flexibility in the budget to allow for various reduction levels

CMS 2010-11 Budget Update11

Local Budget Outlook

Excerpts from earlier memo to County Department/Agency Directors (1/5/10) -

Anticipate that there will be limited or no growth revenue for FY2011 Greatest challenge will continue to be juggling competing needs for

county, debt and education services Possibility that departments/agencies will be asked to use existing

resources to fund increased service demands

Excerpts from more recent county budget update (2/16/10) -

Best case scenario presented was no growth in revenues At best, departments can expect some services to be funded at current

levels However, departments are planning for reductions ranging from 5-15% -

not across the board cuts Departments and services will receive different reductions based on

service priority and performance

12


State Budget OutlookIn the February 2010 General Fund Revenue Report and Economic Outlook, the Fiscal Research Division reported –

• Revenues through January are $35 million short of forecast of $11 billion

• Near the budget target due to $472 million of one-time collections from corporate taxpayers ($272 million more than budgeted)

• Final quarter of the fiscal year contains the majority of the forecast risk – unpredictability in corporate income tax payments and non-withholding personal income tax payments

• At this stage of the recovery economic signals remain mixed, yet most economist believe a sustainable recovery is underway


State Budget Outlook

Mounting budget pressures for remainder of 2009-10 and beyond as prolonged weaknesses in the economy affect revenue collections

Budget included a 1 cent increase in the State’s sales tax rate Expenditures for Medicaid and other income assistance

programs may exceed budgeted amounts A looming issue on the horizon will be the FY 2011-12 revenue

picture

DPI recently reported to State Board of Education

Expecting an announcement lowering growth revenue projections for 2010-11 (budget anticipated a 3.2% revenue growth)

14


What does this mean for CMS?

• Our crystal ball used to forecast revenue is extremely cloudy and uncertain

• We are facing another austere budget for 2010-11

• Revenue growth from taxes and fees are slow to recover from the recession – at state level and locally –our two primary funding sources

• County is signaling that funding may not be available to cover growth, sustaining operations and opening new schools and may require a reduction in funding

• Reductions will be required to cover a $7.3 million increase in the state “discretionary reduction” planned in 2010-11

15


What does this mean for CMS?

• Lagging state revenues may require additional cuts in addition to those originally planned for 2010-11 – another 5% cut would equate to $31.8 million for CMS

• Preparations to address funding cliff anticipated in 2011-12 of $47 million must begin

• Budget alignment to Strategic Plan 2014 and employing the strategic use of resource strategies gleaned from ERS work will be essential

• Emphasis must be on making education a priority at all levels

16



2010-11 Budget Scenarios 1-2 ($ in millions)

17

Scenario 1 – BUDGET REQUEST = New dollars for growth from state and county •State will fund growth. No reduction beyond the increase in the discretionary cut and textbooks •County will fund growth/sustaining/new schools

(7.3)$ Discretionary State Cut(8.5) New Initiatives

(15.8)$ Total Reductions

Possible cuts include:•$3.5 million for a central office reorganization •$2.6 million in building services •$1.7 million by reducing signing bonuses and tuition reimbursement •$2.3 million in transportation

Scenario 2 - FLAT funding from County (growth funded by state per state formula) •State will fund growth. No reduction beyond the increase in the discretionary cut and textbooks •County will provide FLAT funding (requiring us to cover growth, etc)

(7.3)$ Discretionary State Cut(8.5) New Initiatives

(19.0) Growth/Sustaining/New Schools (Estimate)(34.8)$ Total Reductions

Possible cuts include:•$14 million by eliminating teacher positions added back in 2009-2010•$2.3 million by implementing magnet school transportation shuttle stops •$1.4 million by reducing building services staffing


2010-11 Budget Scenarios 3-4 ($ in millions)

18

•Scenario 3 - FLAT funding from County; 3% reduction from State (after growth funded) •State will fund growth. Impose a 3% reduction beyond the increase in the discretionary cut and textbooks •County will provide FLAT funding (requiring us to cover growth, etc)

(19.1)$ State Reduction of 3%(7.3) Discretionary State Cut(8.5) New Initiatives


Possible cuts include: •$1.3 million by eliminating middle school athletics •$8.2 million by increasing class by one in grades 4-12 and eliminating K-3 FOCUS ratio of 1:17

•Scenario 4 – 3% reduction from County; 3% reduction from State (after growth funded) •State will fund growth. Impose a 3% reduction beyond the increase in the discretionary cut and textbooks •County will impose a 3% reduction in funding (requiring us to cover growth, etc)

(19.1)$ State Reduction of 3%(9.5) County Reduction of 3%(7.3) Discretionary State Cut(8.5) New Initiatives


Possible cuts include: •$8.6 million by increasing class by two or more in grades 4-12 and eliminating K-3 FOCUS ratio of 1:17•$1.9 million by eliminating district paid cost for employee dental coverage


2010-11 Budget Scenarios 5 ($ in millions)

19

•Scenario 5 – 5% reduction from County; 5% reduction from State (after growth funded) •State will fund growth. Impose a 5% reduction beyond the increase in the discretionary cut and textbooks •County will impose a 5% reduction in funding (requiring us to cover growth, etc)

(31.8)$ State Reduction of 5%(15.9) County Reduction of 5%

(7.3) Discretionary State Cut(8.5) New Initiatives


To-be-determined possible cuts include: •Eliminating magnet school transportation•Closing and consolidating small schools •Delaying the opening of the new high schools •Changing weighted student staffing weight from 1.3 to 1.2


2010-2011 Budget Calendar Key Dates

20

March 16 Board Budget Work Session @ 2:00 pm



April 13 Formal budget presentation made to Board of Education by Superintendent at regularly scheduled board meeting

April 27 Public Hearing on the FY 2010-11 Operating Budget

April 27 Board Budget Work Session @ 6:00 pm

May 11 FY 2010-11 Board of Education’s Budget Request of the County Commissioners approved at Board of Education meeting

May TBD Board of County Commissioners’ 2010-11 Budget Workshop for CMS and CPCC

June TBD FY 2010-11 County Operating Budget and 3-year CIP adopted at regular meeting of Board of County Commissioners

Questions?

Conclusion219

CMS 2010-2011 Budget Update March 10, 2010. 2 CMS 2010-11Budget Update.

Documents

Transcript of CMS 2010-2011 Budget Update March 10, 2010. 2 CMS 2010-11Budget Update.